{"id":372949,"date":"2026-09-30T16:18:25","date_gmt":"2026-09-30T10:48:25","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=372949"},"modified":"2026-09-30T16:18:25","modified_gmt":"2026-09-30T10:48:25","slug":"corporate-average-fuel-economy-cafe-iii-framework","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/corporate-average-fuel-economy-cafe-iii-framework\/","title":{"rendered":"Corporate Average Fuel Economy (CAFE)-III Framework"},"content":{"rendered":"<div class=\"content-box-green\">\n<p><strong>News:<\/strong> The government notified the final CAFE-III norms on September 29, which will apply to passenger vehicles from April 2027.<\/p>\n<\/div>\n<h2 class=\"red-h2-box\">About Corporate Average Fuel Economy (CAFE)-III Framework<\/h2>\n<figure id=\"attachment_372957\" aria-describedby=\"caption-attachment-372957\" style=\"width: 274px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-372957\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/09\/Source-BT.jpg?resize=274%2C300&#038;ssl=1\" alt=\"Corporate Average Fuel Economy (CAFE)-III Framework\" width=\"274\" height=\"300\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/09\/Source-BT.jpg?resize=274%2C300&amp;ssl=1 274w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2026\/09\/Source-BT.jpg?w=568&amp;ssl=1 568w\" sizes=\"auto, (max-width: 274px) 100vw, 274px\" \/><figcaption id=\"caption-attachment-372957\" class=\"wp-caption-text\">Source &#8211; BT<\/figcaption><\/figure>\n<ul>\n<li><strong>CAFE-III<\/strong> is a <strong>fleet-wide fuel-efficiency framework<\/strong> for <strong>passenger vehicles.<\/strong>\n<ul>\n<li>It <strong>requires manufacturers<\/strong> to keep the <strong>average fuel consumption<\/strong> of eligible vehicles <strong>within prescribed limits.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Aim:<\/strong> It aims to <strong>improve fuel efficiency<\/strong> and <strong>reduce CO\u2082 emissions<\/strong>, while <strong>promoting cleaner technologies and alternative fuels.<\/strong><\/li>\n<li><strong>Notified by:<\/strong> It was notified by the<strong> Ministry of Power.<\/strong><\/li>\n<li><strong>Organisation Involved:<\/strong>\n<ul>\n<li><strong>Bureau of Energy Efficiency (BEE):<\/strong> It <strong>maintains<\/strong> the <strong>manufacturer<\/strong> <strong>passbook, <\/strong>receives<strong> compliance data <\/strong>and allows<strong> credit buyout.<\/strong><\/li>\n<li><strong>Ministry of Road Transport and Highways (MoRTH):<\/strong> It will <strong>enforce testing, calculation, reporting and certification-related provisions.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Origin:<\/strong> CAFE norms were <strong>first notified in 2017<\/strong> under the <strong>Energy Conservation Act, 2001.<\/strong>\n<ul>\n<li><strong>CAFE-III was<\/strong> first <strong>proposed in 2024.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Applicability<\/strong>: CAFE-III <strong>applies to M1 category passenger vehicles<\/strong> <strong>manufactured or imported for sale in India.<\/strong>\n<ul>\n<li>It covers <strong>petrol, diesel, LPG, CNG, hybrid, and electric passenger vehicles<\/strong> with a gross weight <strong>under 3,500 kg.<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Different Phases of CAFE Norms:<\/strong><\/li>\n<\/ul>\n<table style=\"border-style: solid; width: 100%; height: 371px;\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr style=\"height: 30px;\">\n<td style=\"height: 30px;\" valign=\"middle\"><strong>Phase<\/strong><\/td>\n<td style=\"height: 30px;\" valign=\"middle\"><strong>Duration<\/strong><\/td>\n<td style=\"height: 30px;\" valign=\"middle\"><strong>Key Feature<\/strong><\/td>\n<\/tr>\n<tr style=\"height: 150px;\">\n<td style=\"height: 150px;\" valign=\"middle\"><strong>CAFE-I<\/strong><\/td>\n<td style=\"height: 150px;\" valign=\"middle\">2017\u201318 to 2021\u201322<\/td>\n<td style=\"height: 150px;\" valign=\"middle\">\n<ul>\n<li>The first phase introduced <strong>fleet-level fuel-efficiency standards<\/strong> with a <strong>CO\u2082 limit of 130 g\/km.<\/strong><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr style=\"height: 41px;\">\n<td style=\"height: 41px;\" valign=\"middle\"><strong>CAFE-II<\/strong><\/td>\n<td style=\"height: 41px;\" valign=\"middle\">2022\u201323 to 2026\u201327<\/td>\n<td style=\"height: 41px;\" valign=\"middle\">\n<ul>\n<li>The second phase <strong>tightened the standard to a CO\u2082 limit of 113 g\/km.<\/strong><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr style=\"height: 150px;\">\n<td style=\"height: 150px;\" valign=\"middle\"><strong>CAFE-III<\/strong><\/td>\n<td style=\"height: 150px;\" valign=\"middle\">2027\u201328 to 2031\u201332<\/td>\n<td style=\"height: 150px;\" valign=\"middle\">\n<ul>\n<li>The third phase <strong>introduces weight-based fuel-consumption targets, credit trading, cleaner-vehicle benefits and technology credits.<\/strong><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li><strong>Key Features of CAFE-III<\/strong>\n<ul>\n<li><strong>Progressive targets: <\/strong>Annual fuel-consumption targets <strong>become stricter and decline progressively<\/strong> between FY 2027-28 and FY 2031-32.<\/li>\n<li><strong>Credit and debit system:<\/strong> Manufacturers <strong>earn credits<\/strong> when actual consumption is below the target and <strong>accumulate debits<\/strong> when it exceeds the target.<\/li>\n<li><strong>Credit trading:<\/strong> Manufacturers <strong>can pool or trade credits<\/strong> with other manufacturers or buy them from the <strong>Bureau of Energy Efficiency (BEE) to offset deficits.<\/strong><\/li>\n<li><strong>Cleaner vehicles:<\/strong> <strong>Battery Electric Vehicles (BEVs) and Range-Extended Electric Vehicles (REEVs) receive a 3.0 volume factor<\/strong>, meaning each such vehicle is counted as three vehicles for the fleet calculation.<\/li>\n<li><strong>Alternative fuels:<\/strong> Carbon Neutrality Factors (CNFs) provide a <strong>benefit by discounting declared tailpipe CO\u2082 emissions.<\/strong><\/li>\n<li><strong>Technology credits:<\/strong> Manufacturers <strong>can claim 1 g CO\u2082\/km for each specified fuel-saving technology,<\/strong> subject to an <strong>overall limit of 9 g CO\u2082\/km.<\/strong><\/li>\n<li><strong>Small manufacturers:<\/strong> Manufacturers with <strong>fewer than 1,000 eligible vehicles are exempt<\/strong> from the specific CAFE target but must still report their fuel consumption.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 class=\"yellow-h2-box\">About Bharat Stage (BS) Norms<\/h2>\n<ul>\n<li><strong>Bharat Stage (BS) emission<\/strong> standards <strong>regulate the output of air pollutants<\/strong> from <strong>internal combustion and spark-ignition engines,<\/strong> including motor vehicles.<\/li>\n<li><strong>Established by:<\/strong> These standards are established by the <strong>Central Pollution Control Board (CPCB)<\/strong> under the <strong>Ministry of Environment and Climate Change.<\/strong><\/li>\n<li><strong>Based on:<\/strong> The BS regulations are <strong>based on European emission standards.<\/strong><\/li>\n<li><strong>Key Difference between CAFE and BS-VI:<\/strong> CAFE primarily <strong>targets CO\u2082 emissions<\/strong>, while <strong>BS-VI addresses<\/strong> <strong>overall emissions<\/strong>, including <strong>Nitrogen Oxides (NOx) and Sulphur Oxides (SOx).<\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News: The government notified the final CAFE-III norms on September 29, which will apply to passenger vehicles from April 2027. About Corporate Average Fuel Economy (CAFE)-III Framework CAFE-III is a fleet-wide fuel-efficiency framework for passenger vehicles. It requires manufacturers to keep the average fuel consumption of eligible vehicles within prescribed limits. Aim: It aims to&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/corporate-average-fuel-economy-cafe-iii-framework\/\">Continue reading <span class=\"screen-reader-text\">Corporate Average Fuel Economy (CAFE)-III Framework<\/span><\/a><\/p>\n","protected":false},"author":10401,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,4182,12039],"tags":[11872],"class_list":["post-372949","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-environment","category-knolls","tag-9pm-daily-factly","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/372949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10401"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=372949"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/372949\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=372949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=372949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=372949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}